China’s Resilient Demand for Homes

6/19/2013 6:25AM

Housing prices in China’s biggest cities rose 5.3% in May from a year earlier, the fastest increase in more than two years. Michael Klibaner of Jones Lang LaSalle tells the WSJ’s Wei Gu why government measures to cool the property market aren’t working.

This transcript has been automatically generated and may not be 100% accurate.

... the ... in this economy is slowly ... peacefully ... gets home prices keep going ... what's going on ... Johnny me now to talk about this is Michael Iban a ... great time at least a ten foot Johnson and the South ... Michaela so in many home prices in China rose about five percent ... the alley at what's going on ... right so at the moment you have dairy goods ... it's ... sentiment among buyers ... um they believe prices are going to continue rising for the last several months to be as indicated ... in writing ... and you have a policy environment that's a fairly benign so very loose implement a share ... of the restrictive measures ... that creates an environment where fires are very active ... and we look at the tier two cities actually ... we hadn't all ... hi hi in transaction volumes ... in the last four quarters ... yes I can see the new Nanette Tak smashing ... the contributing to that increase in on ... and because I wanna bias in the sun as I explained to get a deal done ... before the capital gains taxes and becoming confused ... and do you see that being a key means that if that was likely to be shown here ... right ... so here ... are it has been the front ... running of the capital gains ... implementation I think that he is probably in the year issue interim By and Longo where we have not been its teeny implemented but there's a wide expectation that it will ... I don't think that's a big contributor ... there are two ways seem worth the price they are right now I think the bigger issue on Wednesday that he is ... one ... of the risks for developers ... around the price ... caps and that is something that you didn't see were all ... down now in more cities going forward to when the loan ... an aging ... Joe you're seeing developers not to increase their licenses for price fixing in trying to watch the next days at a higher price ... and ... and so the developers have this incentive or have ... a disincentive ... to launch ... one Tree crunchy bits and high-end projects as soon as possible before the price caps come in that means for the price data ... you have a very high and mix ... of expensive projects in the last few months ... yes I mean the race ... he knew it looked like it higher ... here than it probably would be outlawed ... I so this in an office a long day but does sound more than three homes in the future ... what's got into meaningful and demand and supply in that category ... and D you think the Chinese government has been successful on some really its attempts ... to code on the property prices ... right ... so ... the luxury sector that's can it be a very challenging place to play in the second half of the year because we will see these crazy ... the ... the palm ... of more widely ... it ... can make it very difficult for new supply in that segment ... um that's difficult for the developers you probably can see those projects get away for recently forego potential profit while I'm bringing them to market ... um ... when we think about what's happening ... on the loan balance of the year I think ... the government to ... heed the call is an ... issue in ... the word love can ... use the housing market has forced the ACA the economic growth by thinking that you would see preceded move the fire and very quickly ... they were to put more restrictive measures in the housing mall ... parking ... they have the risk that actually the economy gets a week or ... so really ... though likely outcome is we see very ... little new measures in the housing market ... and probably the market the housing market does ok I think that's why I we see very sensitive right now fliers really are eager to get into the market with the expectation ... is that prices keep moving on ... sounds like authentic content and if you don't have enough money intended the consequences ... of the government's nationalist ... thinking the much Michael this is late to put a lawsuit to go ...